Europe’s new, suicidal normal

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The world into which the new president of France, François Hollande, stepped this week is a suicidal one. Searching for a vivid image of Euro-desolation, the news media have lit upon suicides. Two suicides last month have stood out.

A 55-year-old man on the Italian island of Sardinia, who ran a little construction business with his sons in a mountain town called Mamoiada in the interior, killed himself when the business went bust. He was known only by the initials GM, and the town’s mayor says he was an industrious man with a close-knit family. His death shocked everyone.

Earlier in April, an older, Greek man, 77-year-old Dimitris Chrystoulas, a retired pharmacist, staged a more dramatic end to his life. Like GM, he said he wished to die with dignity; also like the Sardinian, he shot himself. But he did so in the central Syntagma Square in Athens, near the parliament, leaving a note that prophesied that the “traitors” who have brought Greece to destitution and enslavement to the will of international finance would be hung upside down in the square where he met his end, much like the way Italian fascist leader Benito Mussolini was executed in Milan.

This is the Europe that Hollande is now partly in charge of, a Europe in which it is sometimes preferable to die than to live. He presents himself as a reassuring figure. He says his central concerns will be greater equality, and the youth. He’s stressed that he’s “normal,” which has been widely recognized as code for not being Nicolas Sarkozy, not having a celebrity wife and not having an addiction to wealth. It is true that he is a relief from the hyper-opportunism of the retiring president, who seemed willing, in the past few weeks, to be anything to anyone in his desperation to claw back the lead from Hollande.

He’s also more substantially reassuring because he’s a mainstream, center-left politician who has, on his telling of the story, always eschewed extremism. Although his doctor-father voted National Front, he has spoken of the pain of disagreeing fundamentally with one whom he loved. Yes, he has tacked left (he’s no stranger to opportunism himself), but most commentators don’t take that too seriously.

In Greece there is none of that moderation. The two centrist parties, New Democracy on the right and Pasok on the left, saw their share of the vote plummet. New Democracy remained the largest, with nearly 19 percent, but Pasok, at just over 13 percent, was pushed into third place by Syriza, a radical leftist group with Marxist leanings, which received almost 17 percent. The Communists did well too, with some 8 percent; and most alarming, the (very) far-right Golden Dawn party, which for 20 years has ventured deep into neo-Nazism and relishes street fighting with leftists, entered parliament with 7 percent of the vote, on a program of cleansing Greece of foreigners.

New Democracy may be able to cobble together a non-extremist coalition once more. But its mandate for further cuts and reforms, demanded by a European Union led by Germany, is terribly damaged. For the hard-pressed moderates in Greece, the victory of Hollande in France is a rare shaft of light. He has pledged himself to argue for growth in Europe, insisting that austerity alone is self-defeating. Unlike little and broke Greece, Germany’s indispensable partner, France, may have the clout to obtain relief for the screaming economies of the south.

Germany has the money. And there have been signals – from Chancellor Angela Merkel, from European Central Bank President Mario Draghi and most recently from European Economics Commissioner Olli Rehn – that the corset might be loosened somewhat. “The stability and growth pact is not stupid,” Rhen said encouragingly in Brussels over the weekend.

But Germany is not likely to be generous. France had a €70 billion ($91 billion) trade deficit last year and has a debt of €1.7 trillion. It lost its triple-A rating earlier this year. It also has 10 percent unemployment and rising; and in the first round of the presidential elections, some 30 percent of the French votes were for the extreme right or left. France’s clout is limited. Hollande has won a famous victory, but he has inherited a vastly difficult state. It needs to grow – and it needs to shrink a government that spends 54 percent of GDP.

The only way France – and all the other European countries struggling to grow, hold down unemployment, pay off debts and return to “normality” – is going to right itself is through reform. It needs to reform the banking system, which most people don’t care about, and reform labor and welfare, which people do. Reforming labor has meant and will still mean working harder, more productively, more flexibly, and, in many cases, more cheaply. Reform of welfare means lower benefits, available later. On second thought, this is not quite “normality.” Europe has been accustomed, for decades, to believe that things can and do – in the main – only get better.

This is instead the new normal, the politics of things getting worse. Politicians, whom most of us despise, have to guide our societies through this. We should hope they are as normal – and stay as normal – as Hollande, and share his dislike of extremism. And we need them to do that while also being abnormally skillful managing rising extremism at the same time. That will be some act.

PHOTO: François Hollande (C), Socialist Party candidate in the 2012 French presidential elections, kisses a woman as he visits a street market with his companion, Valerie Trierweiler (R), in Tulle, May 5, 2012. REUTERS/Regis Duvignau

This Hollande guy is either ignorant or just willfully opportunistic.
He proposes more spending when they already spends 54% of GDP. He proposes tax on the wealthy of 75% knowing that won’t make a material difference in revenue.

One can only conclude that he is pandering to the mass to get votes, nothing more.

He and all liberals around the world have no solution. These fools probably don’t even know what the root problem is.

I personally believe the real hero will be the one who gets elected and has no intention of being reelected. Because he is the one that will come in and point straight to the mass: “You ARE the problem!”. Yes the bankers and the crony rich are a serious problem too and need to be dealt with, but their size is not as large. Even if the bankers and the crony rich vaporize tomorrow, the problem will still be here, unemployment will still be high.

The first part of the true solution will involve telling the mass: It’s you who have to change first. You need to have a different view of life, you have to change your attitude, you have to have a different lifestyle, you have to have a different look on yourself.

The last time a European country was pressed as hard as Greece, Spain, Portugal, Italy and Ireland have been pressed since the financial crisis of 2009, Europe found itself in WWII.

83 years after the start of the Great Depression, it seems Europe’s very political “economists” have forgotten the lessons of history: You cannot get out of a depression by forcing austerity down a people’s throat.

What the Merkel controlled Eurozone is doing now is like kicking a dead dog. But this dog isn’t dead. It’s about to turn around and bite its master.

It’s time to devalue the Euro and kickstart the peripheral European economies before it’s too late.

The standard of living for these countries have been high for a while because they used to be very competitive in what they produced.

Remember the time when they produced cars, tv, machinery, airplanes, ships, etc.. that pretty much no one else can produce.
They came to the world market, and the rest of the world was producing tomatoes, potatoes, wheat. Basically things that almost everyone can produce.
They were able to trade a car for example 1000 tons of tomatoes because they can dictate it. This leads to very wealthy countries.

It lasted for a while, because that rest of the world started to learn how to make cars, tv, machinery too. In fact they eventually discovered ways to make better tv, better cars, better machinery. These countries fall behind in economic competitiveness and productivity as well as the quality and cost of what they produce.

It’s inevitable that the standard of living goes down to match the new comparative capability. The world no longer buys their stuff for even let’s say 1 ton of tomatoes, let alone 1000 tons. Then people go unemployed, there is nothing left but low wage job for them. And the wage is low not because of the evil corporation. It’s because too many people can do that job.

Great Depression and WWII scares me every time. WWII solved the problem by making the problem (ie the people) ‘disappear’. The larger the scale, the more deadly and destructive the war, the more comprehensively it ‘solved’ the problem. We don’t want that, yet there are still enough nutjobs today that still want to solve the problem that old way.

Other than lower wage, I don’t see other option. A low paid job is better than no job at all. While we hesitate the nutjobs will just make their voice louder and louder.
Anyone has a better idea?

Here’s a better idea. Ditch the euro. How many more years of watching Germany feast on the inherent inequalties of EU nation’s economic capabilities do you think the losing nations will tolerate? And please, enough with the “armageddon will be unleashed” argument. The euro is an unfortunate blip in the history of world currency experiments. Start thinking long-term!!

Great story. We have just had a budget in Australia and we are dubious it will come out close to the forecast. However, we are so much better off than Europe. Why not think of immigrating to this country. Asia is the future and we have a great climate and a stable democracy and quite multicultural.

Breaking it is bad short term because this will not solve the problem. Currency is just a metric for measure. Some people make joke about instead they should be changing each minute each Greek into 2 minutes. That way 8 hours work become 16, tourists staying one night become 2 nights. Revenue will double, debt slashed in half.

And the real deadly thing here is that things will actually get worse. Isolation reduces trade which reduces consumption (ECO101), thus standard of living will go down even further. Isolation breeds nationalism.

This is where the nationalists can start feeding on people’s anger and despair. It will just accelerate the coming war which is the inevitable child of all nationalist movement. Hollande will fail, and Marine Le Pen is just smartly waiting now, will eventually send him a thank you note.

Having said that I would very much like to see Greece go. Their people want it.

Let’s see what happens next. At worst, they are small enough to be contained, I am sure the toxic papers are mostly with the ECB now. At best their failure will be a stern warning to those who refuse fundamental reform and growing up. In the unlikely case that they can actually do well after that: even better, great!

Here’s a better idea. Ditch the euro. How many more years of watching Germany feast on the inherent inequalties of EU nation’s economic capabilities do you think the losing nations will tolerate? And please, enough with the “armageddon will be unleashed” argument. The euro is an unfortunate blip in the history of world currency experiments. Start thinking long-term!!

An obvious solution to this problem would have been possible in the beginning:

Greek public debt could have been written off 100% with the help of the Eurozone and the IMF. At that time, the Eurozone and the IMF could have imposed very strict conditions before any new loans would be granted. Failure to adhere to those terms would have been grounds for forcing Greece to leave the Eurozone.

Such an approach would probably have reduced the total cost of this crisis by hundreds of billions of Euros – perhaps trillions and quickly stemmed the contagion. Confidence in the Euro would have been restored immediately and years of uncertainty avoided.

Greece does not have access to the financials markets now nor will they if they leave the Euro. The current debt will never be paid. Can they self support themselves? If not then predict a lot of violence.

Clearly, “Free Trade” and “globalization” have failed the nations of the West. And equally as clear, the broken corporatist Governments of the West, who think they can “hire” and “fire” citizens at their sole discretion, have failed the peoples of the West.

Failure, failure, failure! And all we hear is how ungrateful we are for being crushed by States that do not respect our ethnic identities nor our concern for helping our own people as opposed to helping strangers we are ordered to help by our corporatist State rulers. What utter nonsense! There is no divine commandment that we must surrender self-government.

What we are seeing, throughout the West, including the USA, is a rebirth of ethnic Nationalism. A rebirth of self-determination for the native peoples of the West. We are dealing with nations, not entitled Kingdoms who can force repugnant policies on their subjects by decree. Time to admit the nearly universal failure of so-called “Capitalist” (crony capitalist) systems. Time to restart how we govern ourselves and who we work for.

If Americans and Brits could get off their high horse about mainland Europe, the EEC and the Euro, perhaps there could be intelligent discussion. Let’s not forget which major world economy lost its top credit rating because its Congress couldn’t decide on a debt ceiling – purely as a result of partisan bickering – that country of course is the US – no socialist or communists in that group.

I lived in Europe a good part of my life including Germany, Belgium, Spain and Switzerland. In each of those countries a saw a government that put national infrastructure maintenance and improvement as a top priority versus tax breaks for the wealthy. Military spending is much, much lower than in the US or Britain. Furthermore, education and healthcare didn’t impoverish their middle-class as here in the US.

Greece has always allowed fraud amongst its 1% and political class. Even its first king after independence from the Ottomans quit and went back to Germany – disgusted with the internal fights and frauds. Greece, unlike Spain, Ireland and Italy, never developed a real economy that didn’t rely on subsidies from its neighbors. This isn’t a fault of the Greeks per se, but of a ruling class that has squandered billions while fattening their own pocket. Don’t forget, some of the richest families in the world are Greek. Where are they in supporting their country?

THe fiscal crisis in most countries would be resolved by making the rich, and esp. the off-shore super rich (1/3 of the world’s wealth is held off-shore, untaxed) pay their fair share of taxes – like 50% of their income and 5% of the net worth ANNUALLY. Look at the taxes the US middle-class pay and you see why 75% of the baby boomers have less than $10000 saved for their retirement.

Based on 2011 numbers. In the US, even if you tax every “single penny” that anyone makes above 250k, you only increase revenue by $800B

Still about $800B deficit!
People repeatedly said it’s about entitlement.

Europe don’t even have that big of luxurious national resources, namely the rich (both the crony rich and the ultra-productive rich). Any idea of redistributing wealth does nothing to the structural problem, only making it larger and kicking the can down the road.

Trickle down economy does not work because the bottom outbreeds the top. (Note that I am not saying the all people currently on the top deserve to be there)

No, zip, nil, nada economic system works when the unproductive and takers outbreed the productive and contributors. It seems to happen at all levels, from global, country, regional, to within ethnic groups.

Author Profile

John Lloyd co-founded the Reuters Institute for the Study of Journalism at the University of Oxford, where he is Senior Research Fellow. Lloyd has written several books, including "What the Media Are Doing to Our Politics" (2004). He is also a contributing editor at FT and the founder of FT Magazine.